Gilberto Company currently manufactures one of its crucial parts 70,000 units per year of variable costs are $2.20 per unit, fixed costs related to making this part are $70,000 per year, and allocated fixed costs are $35,000 per year. Allocated fixed costs are unavoidable whether the company makes or buys the part. Gilberto is considering buying the part from a supplier for a quoted price of $3.40 per unit guaranteed for a three-year period.

Calculate the total incremental cost of making 70,000 units. (Round cost per unit answers to 2 decimal places.)

Calculate the total incremental cost of buying 70,000 units. (Round cost per unit answers to 2 decimal places.)

Should the company continue to manufacture the part, or should it buy the part from the outside supplier?

	Buy
	Make